Bank of India (BoI), as part of its retail initiative and technology plan, has embarked on a Smart Card pilot project in Pune .
By end-August, BoI account holders at any of the 26 branches in Pune can avail of the Smart Card, which is essentially a pre-paid offline debit card based on the embedded microprocessor technology, facility. Account holders will be able to load money -- e-cash -- on to the Card at any of the bank's 26 branches by either getting their account debited or paying cash. On purchase of goods the equivalent value of the transaction gets deducted from the card.
The service facilitates cashless transactions at merchant outlets in association with Venture Infotek Global Pvt Ltd, a Mumbai-based consumer payment processing company.
More From This Section
The card can also be used to withdraw money from any of the 26 designated branches, irrespective of the branch where the customer holds his account. It can be repeatedly used until the entire amount gets exhausted and can be reloaded.
The card-holder, thus, will no longer carry the risk of carrying cash, is assured of safety via authentication through personal identification number while for the bank there is no credit risk as money is pre-paid, it can define limits for storage of memory for easy risk management, has tamper-proof data embedded on chip and reduces dependence on telecom infrastructure.
"The bank's Pune experience will be gradually replicated in other cities. We have set a conservative target of 15,000 in the current fiscal for issuing these cards. We expect an incremental growth of 10,000 every fiscal thereafter," said Nagesh Pydah, deputy general manager.
The cards will be issued free of cost in the first year and a nominal fee will be charged in the subsequent years, he said.
Anil Sinha, managing director, Venture Infotek, said that Smart Cards solve the transaction issues related to the problems of change/ non-availability of small denomination notes, does away with the handling and distribution of cash and facilitates the concept of any branch banking and any time money. It can also be used for payment of utility bills.
Piyush Khaitan, vice-chairman, Venture Infotek, said, of the estimated Rs 10,50,000 crore worth of annual personal consumption expenditure in the country, only Rs 15,000 crore was spent electronically.
Of the total currency in circulation, over 19 per cent is held in cash in India and this can be brought down to 6 to 8 per cent like in other developing countries in South-East Asia only with the increased usage of Smart Cards, Khaitan said.